PayPal, Google, Facebook And Apple Are Fighting For This New Multibillion Dollar Market

Suddenly, payments are a big deal again. There's a whole new market and everyone from titans to startups are going after it.

Two things are driving it:

Mobile. Every company is betting that we'll use our phones as wallets.

Virtual goods and Facebook. Somehow, Zynga and other social games makers on Facebook have managed to make micropayments work. This opens up all sorts of new potential opportunities to make people pay for stuff and to use Facebook's social graph to drive more people to pay for more stuff.

In this context, PayPal's hitting 100 million active users is pretty significant, because payments are a network effects business. Consumers will only use a payments service that tons of merchants use. Merchants will only use a payments service that tons of consumers have. This is why Amazon and Google haven't made much inroads in the space despite their massive reach (and, in the case of Amazon, superior product).